Blueknight Energy Partners, L.P.
Q4 2020 Earnings Call Transcript

Published: 10 Mar 2021

[Operator:]

Good morning. My name is Anastasia, and I will be your conference operator today. At this time I'd like to welcome everyone to the Blueknight Earnings Conference Call for the Fourth Quarter 2020. I would now like to turn the call over to Chase Jacobson, Blueknight's Investor Relations Advisor and Managing Director with Vallum Advisors. Please go ahead.

[Chase Jacobson:]

Thank you, and good morning. We are pleased to welcome you to Blueknight's conference call where we will discuss financial and operating results for the fourth quarter and full-year 2020. Andy Woodward, Chief Executive Officer will update you on the operational performance, external factors influencing the business and strategic priorities. Then Matt Lewis, Chief Financial Officer will provide an overview of fourth quarter and 2020 financial results. In addition, management will provide its outlook for 2021 and beyond and discuss in more detail Blueknight's unique position in the market and its long-term growth strategy. After our prepared remarks today, we will open the lines to address any of your questions.

[Andrew Woodward:]

Good morning. And thanks to everyone who dialed in. I’m excited to be talking with you today and we’ll report on our accomplishments throughout 2020, as well as speak for our long-term vision for Blueknight as we continue our journey of transforming the partnership into a leading pure-play infrastructure terminalling company. The successful sale of our crude oil business was a monumental step in that direction. We are taking additional steps as well, strategically, utterly and how we interface with our customers and key stakeholders. For instance, we launched a new refreshed website earlier this week, updated our logo, and from a marketing perspective, we have intentionally rebranded ourselves Blueknight to better align with our strategic priorities in the end markets we serve. These are small steps, but collectively help us to reinforce and further clarify our vision and strategic direction that we believe will lead to meaningful results. On today's call, we will walk you through this journey at first discussing how we transform the business over the last year and where our business stands today, including the various accomplishments we reached in 2020. Matt will provide additional details on our fourth quarter and full-year 2020 results. And then I will discuss our active growth strategy and market views and outlook for 2021. This time last year, we began to lay out our intentions to transform Blueknight into a leading infrastructure terminalling company. In early 2020, we initiated a review of strategic alternatives for our crude oil businesses, specifically pipeline and trucking initially, and then later the Cushing storage business based on further review. Despite a challenging market backdrop with COVID-19, we successfully executed on those plans and sold these three businesses via some of the parts transaction with three different buyers to maximize value.

[Matthew Lewis:]

Thanks Andy. Yesterday, we reported financial results for the fourth quarter and full-year ended December 31, 2020. As a reminder with the sale of the crude oil business these segments are presented as discontinued operations. Since the transactions did not close until 2021, many of our fourth quarter and full-year metrics discussed today include both continuing and discontinued operations. We have modified the presentation of certain tables in our earnings release to ensure investors have visibility into both components. Additional information regarding the partnership's results of operations will be provided in our annual report on Form 10-K, which we expect to be filed later this afternoon with the SEC and available on our website. Blueknight’s fourth quarter and full year 2020 reported net loss was $29.2 million and $13.5 million respectively. This included an approximate $39 million loss related to our crude oil trucking and pipeline segments that were classified as assets held for sale and calculated based on the difference between our net book value and estimated net proceeds under the sale agreements.

[Andrew Woodward:]

Thanks, Matt. We're excited about Blueknight’s achievement over 2020, which are indicative of what this team can deliver on in the future. And since for the first time in a long time, we have both a solid stable business and a supporting capital structure with ample liquidity to conservatively fund our growth going forward. As I briefly touched on earlier, our goal is to build on our unique platform of infrastructure terminalling assets, by leveraging our existing footprint, strong customer relationships, and experience in owning and operating terminalling facilities while maintaining a disciplined capital allocation strategy with a focus on maximizing risk adjusted returns. In terms of our strategy from here, we plan to pursue growth in the following three areas. The first is organic expansion and asphalt with new or existing customers. We believe the outlook for the asphalt market is positive and we're in a great position to capture new growth. Second is growth from acquisitions. The asphalt terminalling market remains fragmented with storage assets owned by refiners, midstream entities, construction material companies or paving contractors. We believe the actual operation and ownership of these sites are considered non-core for a number of these owners. We also believe the current environment is conducive to M&A around non-core assets as many companies optimize their portfolio to raise capital to reduce leverage. Similar to our own strategy last year, we expect this trend to continue and now with more financial flexibility, are in a good position to act on these opportunities. Third, in an area that gets us very excited, that in complimentary services or products at our existing or future sites. A number of our sites today are in some of the most attractive regional demand centers in the country, with many having available acreage for development and access to rail and water. Our plan is to evaluate these sites and leverage this footprint into other complimentary services. We are very excited about these growth prospects and firmly believe with our renewed focus and attention on core operations, we will uncover many growth opportunities for Blueknight over the long-term. Turning back to our 2021 outlook in the markets we serve. We see a stable 2021 environment for asphalt business, much like what we saw in 2020 and remain bullish over the medium and long-term driven by our ageing roadways and legislative support for a more comprehensive infrastructure funding bill. Despite lingering macro-economic uncertainty at the state budget level from the impact of the COVID-19 pandemic, Western road and highway construction has remained relatively resilient. We began to see improvement in lettings for highway construction projects for the end of 2020. This near-term dynamic along with several other recent funding mechanisms put in place, such as the one-year extension of Fixing America's Surface Transportation or FAST Act at current funding levels. And the $10 billion of part of the relief as part of the Coronavirus response and Relief Act should support investments in our nation's roadways throughout 2021. We are even more encouraged beyond 2021 driven by the federal funding proposed at levels not seen in 15 years. We are optimistic that the new bill will be reached sometime this year and could lead to 30% to 40% higher annual funding versus the prior five years. As such, our guidance for 2021 is as follows; first, we expect adjusted EBITDA from continuing operations excluding synergies from the crude oil sale to be in line with 2020 with normal seasonality quarter-to-quarter as Matt discussed earlier. Second, total maintenance capital expenditures are expected to be between $5.5 million to $6.5 million. And lastly, we remain committed to a full year distribution coverage target of at least 1.2 times or greater. And as Matt mentioned already, based on how we plan to allocate capital, we updated our long-term coverage target to be 1.3 times or greater on all distributions and maintain a long-term leverage target of 3.5 times. We believe these targets appropriately balanced the risk and return profile for Blueknight and lead to sustainable value creation in the future. In summary, we are excited about our future prospects. We’ve undergone a major transformation over the last year and look forward to building on that success with our market, leading asphalt terminalling business focused on infrastructure and transportation in markets. With that, we'll open the line for Q&A. Operator?

[Operator:]

The first question comes from Jeff Bailey with . Please go ahead.

[Jeff Bailey:]

Andy, Matt, another great quarter, you guys are spoiling your investors over the last year. Thank you.

[Andrew Woodward:]

Appreciate that, Jeff.

[Jeff Bailey:]

My first question is just kind of a housekeeping question for Matt. Matt, is there a step down in the increment above LIBOR, that Blueknight will pay as the leverage turns go down. So as you went from say 3.5 to 2 times leverage. Is that that spread over LIBOR is that less than before? So as we calculate interest costs, we’re going to be using a lower spread over LIBOR?

[Matthew Lewis:]

That’s correct, Jeff. So the way that that works is once we deliver our quarterly compliance certificate, based on that kind of printed leverage ratio that will kind of then correlate to our pricing grid. So, if you think about the transaction, since it really occurred in March, we’ll have the lowest leverage when we deliver financials in May for first quarter. But we do get benefit at the end of 4Q based on being at 3.83 times. And that would drop us about 25 basis points on our pricing grid. So that puts us around LIBOR plus 2.5%. But then you also have to think about the commitment fee or the undrawn portion that does have an added to that number as well that you need to think about on all in all basis.

[Jeff Bailey:]

Yes okay, great. And then I was a little curious about the leverage target of 3.5, arguably that’s a more conservative leverage target, because the portfolio is so much more stable now with Cushing and the other - and the pipes and the trucks out of the business? So it could be argued that you’ve made your leverage targets more conservative. Could you kind of explain your reasoning behind a 3.5 leverage target?

[Matthew Lewis:]

Sure. This is consistent with the target that we've had historically. And I think generally looking at us, we think about things conservatively as well now, obviously depending on the structure of future contracts. And as you think about extending tenure on some of those customer contracts as well, you could potentially make an argument for a different long-term leverage ratio that we think about, but we kept that consistent at this time.

[Andrew Woodward:]

Yes Jeff, this is Andy. I think one important point that we want to, that we hit, I think in our prepared remarks. But I want to reinstate here is, we’re looking at this company from a lens of forever company and - this is in a company that we intend to build and flip. And through that lens, we are looking at it from a very conservative standpoint, from a capital structure. Where we have the flexibility to not only invest where we think it makes sense from a discipline standpoint to invest. But also to have the company be able to handle any potential cycles that we may go through over the long-term. So that’s our position on the leverage, but the coverage as well. And we think - when we balance the two, it creates long-term value for our unitholders in a very sustainable manner.

[Jeff Bailey:]

Wonderful, we’ll call that the Blueknight fortress balance sheet.

[Andrew Woodward:]

I like it.

[Jeff Bailey:]

So Andy is, the evaluation of the common moves in a favorable direction, trading around seven times distributable cash flow, the yield sub 6% today? How are you thinking about your options for financing growth? Has that, does that open up equity finance growth for you?

[Andrew Woodward:]

That’s a good question Jeff. And one thing just to note there before I give you some, some comments is that we did update our investor presentation today, and I encourage you all to check that out and similar to our presentation last year. We lay out our, per capital our financial principles. We do believe that those principles - are principles for reason that they truly are unwavering and allow us to give us the framework to think through decisions like this. And so from a capital standpoint, our goal here is to self-fund this business - without accessing the public equity markets, as we all know MLPs of the past did a lot of equity issuances. A lot of times, those equity issuances were at a discount and the projects, if there was a project that they were pursuing may not have always turned out the way that they intended. And so there might've been near-term accretion, but over the long-term, it was rather dilutive. So, we’re really focused on maximizing value through our capital allocation strategy. And so with leverage at two times, we have ample liquidity to be able to pursue the growth projects that we intend to pursue going forward.

[Jeff Bailey:]

Yes okay, wonderful, wonderful. And then last two questions are kind of related. First of all, is there any opportunity for Greenfield asphalt terminal projects or would your strategy be primarily just inorganic acquisition? And then related to that, to a degree, would cash finance dropdowns from Ergon be, because that come back into the picture, especially if the corporate tax rate gets raised to 28% that's all I got? Thanks Andy and Matt.

[Andrew Woodward:]

No, those are all good questions, Jeff. So we appreciate them. From an organic standpoint, let me just talk about just high level from a growth standpoint. We really look at it in the three buckets that I laid out earlier. The first is organic within asphalt then, and in our minds pursuing growth in asphalt is really the fairway for us. It’s down the fairway. All is within our core competencies it allows us to really unlock synergies over time through a more diversified portfolio of asphalt sites. And we see that both organically and from acquisitions. And so we don't see one versus the other. We see them in tandem and our goal over the next year and beyond is to create a hopper list of both organic opportunities and acquisition targets. And so based on that list, we’ll prioritize as Matt mentioned on a risk return basis to figure out what to go after in that . But again, we look at organic and acquisitions in tandem. And then the third area of growth for us, which we get equally as excited about, is finding ways to leverage our current footprint into other - products or services that are complimentary to the asphalt market. And what excites us about that is today on the sites that we own, we're only doing asphalt and a lot of these sites have excess land. They got access to good rail. They have access to good water. And we want to look at those sites more from a utilization standpoint, to try to drive as much margin per acre as we can. And that's going to take a little bit more time, but I see that being a lot of organic activity as well. So hopefully that answers your question, Jeff.

[Jeff Bailey:]

Yes, and then you didn’t mention any dropdowns from Ergon, especially if the corporate tax rate increases. So I take it that might be off the table?

[Andrew Woodward:]

No, I wouldn’t necessarily say it's completely off the table. I would say from our perspective, and I think from Ergon’s perspective that we want to see Blueknight, self-funded business as a standalone entity. I think down the road as we begin to generate some real growth and success from the activities I just mentioned. And we began trading at the right levels that we’re comfortable with, I certainly wouldn’t necessarily take that off the table from either side.

[Jeff Bailey:]

Okay. Well the pro forma - filed with the SEC was instructive and that shows the returns on tangible assets of the asphalt terminals are like 50%. I mean, it's just a phenomenal business. That’s all I got. Thanks guys.

[Andrew Woodward:]

Appreciate Jeff.

[Matthew Lewis:]

Thanks, Jeff.

[Operator:]

The next question comes from Charles Neuhauser with Mainwall Investment Management. Please go ahead.

[Charles Neuhauser:]

I don’t want to sound like I’m looking a gift horse in the mouth and like the previous caller. I agree that you’ve made a lot of progress and done a commendable job over the last year or so. However, the distribution has still been in a downtrend for the last several years? And my question is what - do you need to see or what do I need to see or what do I need to see what is there that we need to see to result in your raising that distribution in the future?

[Andrew Woodward:]

Thanks, Charles. This is Andy, I'll take that question first and I'll let Matt chime in. I think first and foremost, our approach here with Blueknight going forward, is taking some of the lessons of the past. And I'm speaking mainly to the MLP market and improve drastically upon - on that. And what I mean by that is, I think in the past, what you saw with a lot of companies is not necessarily a business strategy or corporate strategy, but oftentimes more of a distribution strategy. And what Matt and I, and the rest of the management team are trying to do here, is create a real corporate business strategy for Blueknight long-term, and not be driven by distribution growth rates that drive decisions, but rather be driven by actual good corporate strategy. And so that's first and foremost. And then I think second to that goes back to how we think about allocating capital, similar to what we had been communicating last year. The priorities, we think about in allocating that capital are first to get leverage down to levels that we think, allow us to be successful from a growth standpoint, and also risk standpoint. And I think we've achieved that already. And so, we've checked that box. I think second, from a risk return standpoint would be, looking at growth projects and acquisitions on a risk adjusted basis. And we want to make sure that we have liquidity and the firepower to be able to pursue those growth opportunities, and not set up the capital structure in a way where we're limited in anyway. Because as we all know, if we're successful there, those are going to be our highest return projects and opportunities that then lead to more cash flow that then can return be - returned to investors in the form of distributions. And so, third to that would be returning capital, to our investors. And I think, the way we think about that is either opportunistically looking at the preferred, which right now is our highest form of capital, cost of capital at the moment. And again, looking at the preferred would allow us to retain more cash going forward, then - we would then be able to return back to investors through the form of distributions. And so distributions are our last priority, but it's something we're looking at all the time. And what we want to strive there is ensuring that we have an underlying cash flow profile that is very supportive of any distribution increase in the future.

[Charles Neuhauser:]

Okay, when you talk about the preferred, you’re talking about buying some back retiring it, is that what you meant?

[Matthew Lewis:]

No, that would be correct with it - with yielding kind of right around 10%. And what we've done right now is taking the proceeds from the transaction to repay debt initially. In our mind, we're taking that in steps because its credit enhancing and I think puts us in a strong position as we think about extending the maturity of that facility. But then thereafter, we would look to opportunistically potentially repurchase preferred units, if we didn't have a better use of that capital for any of the number of the organic projects that Andy’s discussed or potential acquisitions.

[Operator:]

The next question comes from Steve Chick with Yucaipa. Please go ahead.

[Stephen Chick:]

Yes congratulations, guys. I have a few questions I guess, first off on the numbers a little bit for the corporate cost synergies, the range that you're expecting the $1.5 million to $2.5 million. I must call $2 million at the midpoint. Can you just talk generally about what sort of line items are, where you see the costs, crossed out and what the timing we can expect is, in terms of achieving that run rate, is it something that kicks in right? Can we kind of model it out as starting at the close of the deal on or is there a reason why it might kind of - come in a little bit more over time and lumpier would help?

[Matthew Lewis:]

That's a great question, Steve. And we think about that as kind of run rate targets. And so our ability to capture that during the calendar 2020 will be dependent on, when they would become effective. And so of that amount, I would say that the lion share of it, over half, would tend to be related to kind of corporate overhead type reductions, when we think about individuals that were part of the organization when we had the crude oil business that would not be part of the organization in a pro forma structure. And so that will be dependent, on when we get through transition services, for example, on some of these transactions. So it does vary a little bit. Thereafter, when you think about, there are some third-party type services that we had with that business that we can, upon closing can move forward and choose to, kind of terminate those types of services, whether that was, corporate type memberships or certain third-parties that we were working with. So, that would be a little bit more specific to when the transaction actually closes. But then the remainder is just kind of growth - additional or trust that I don't know if I'd call it stretch necessarily, but I think Andy, corporately and culture wise, is we're looking to try to improve the business in all areas. And so, we've got maybe more go get in our mind that are a matter of us is a leadership team driving that across the board.

[Stephen Chick:]

So, I'm sorry so the, like in terms of achieving that type of run rate? Is it, something we should consider, by the second half of 2021, when you should achieve it or is it something that kind of even pushes out into 2022, if that makes sense? And then second, by the way, given the size of what you sold off, it does seem like, you've been potentially conservative with the costs out synergy? And I'm wondering if you're actually intentionally leaving some costs in place, because obviously, the focus going forward from here is to reaccelerate growth. I'm wondering if that's kind of in your thought process as well?

[Andrew Woodward:]

Yes Steve, this is Andy. I think - to your first question, maybe the way to think about it is for 2021, where we're aiming for the low end of that range? And then we're expecting in 2022 to be able to recognize the full range there, is the way - from a modeling perspective, I would think about it. I think second to your point yes, we were, when going through our analysis, looking at the pro forma company, from an org standpoint. We wanted to ensure that we had the resources available to be able to start looking at growth in a meaningful way. And so that absolutely, was part of our part of our approach and how we looked at things going forward.

[Stephen Chick:]

Okay, all right, that makes sense it’s helpful. Second, just can you clarify on the contract at Newcastle contract - the seven-year agreement that was it more favorable economic terms? I think that commenced in September of 2020. To some of the better economic terms, subject to seasonality of course, but does it some of that still take or benefit you and will benefit results, when in kind of the first eight months of 2021, on a year-over-year basis?

[Matthew Lewis:]

That's correct, Steve. We started realizing those benefits immediately. So within the third quarter or excuse me within the fourth quarter really it’s a clean quarter on the asphalt side. We're starting to realize those benefits. Yes, absolutely throughout 2021, we'll see those benefits from - that contract itself.

[Stephen Chick:]

Okay, great, that's great. And then Andy, can you talk a little bit on some of the M&A landscape within the asphalt, your core asphalt business? Can you talk about - generally the size and the opportunities that could take hold here. And I'm kind of thinking about relative to say that - the 2018 sale of facilities that you sold to your general partner, you know I think as I recall, is about a call for a while EBITDA business of give or take $9 million to $10 million? And I'm wondering, as you look at some of the independent acquisition opportunities within asphalt, could these be pretty sizable acquisitions and opportunities or are we kind of looking at more like singles and doubles? As you kind of move to like a, more aggressive growth through acquisitions stand?

[Andrew Woodward:]

Good question, Steve. I think it's, I think the way we think about it is, we would love as many singles and doubles, as we can find. And - being a fairly fragmented market, there's certainly more of those types of transactions out there. With that said, I mean, we do have our eyesight on larger potential transactions within the asphalt space, it's just those types of potential transactions can take more time. And - like anything, there's less of them, and you need a willing - seller on the other side. But we are, to that point, looking at both, and it's part of our priority list of how we assess things from a capital standpoint. And I'm excited again, about dialogues we're having right now across the board on the growth side. And what we're finding is similar to what I said earlier is, a lot of companies out there that own these sites, would consider them non-core in this market. And a lot of them are going through their own portfolio optimization strategies at the moment. So, we think it just creates the right environment that's conducive for these types of discussions and dialogues.

[Stephen Chick:]

It's helpful. And one last one if I could sneak one in here, Andy when you talk about kind of complimentary growth avenues, and let's say, renewable diesel, specifically I know what's early, but as you pencil out, what kind of the economics could be on that type of business? Is it, from a capital and then up for a while profit standpoint? Is it, could it be pretty attractive to what, your core asphalt business now beating, could these facilities say have a similar kind of, give or take $900,000 profit per terminal economics? And then on the capital side, because it sounds like you want to ideally, leverage your existing infrastructure, you could actually be less capital intensive to grow in those areas?

[Andrew Woodward:]

Yes now, those are both - good question. I think - on the complimentary services, like you said, there is, what excites us about that area is one, like I said before is, gives us an opportunity to leverage our existing footprint, which then in turn, because we have the infrastructure many times in place. We have the land in place. Then in return, leads to better overall economics and returns for us if we do identify a growth opportunity or project on our existing sites. And so, that gets us very excited about. And then two, the way we think about complimentary services or areas that get us very excited about it is, when it overlaps with our existing customers. And one reason we like renewable diesel or other type of renewable projects, is oftentimes these are the same customers we’re dealing with on the asphalt side. And so, it certainly checks that box from that standpoint and it’s allow us to provide a new solution to them as they begin to expand their own business and then the services that they offer. The second is the infrastructure, like I said is in place, but a lot of the infrastructure required around renewables, biodiesel or the feedstock side requires heated tankage. And so similarly, with our business today, on the asphalt side, we have that infrastructure in place, asphalt requires heated tankage. So again, and then probably finally, as it fits within that niche or specialty service area, these types of new products, which fits well in our minds with asphalt, and it feels - is the type of business for us at our size that we want to be getting into going forward. And so, renewable diesel is a characteristic of the types of new products and markets we want to start evaluating and pursuing. But that's just one good example. And again, I think the criteria what we’re looking through renewable diesel, checks a lot of different boxes. But from a return standpoint, what we’re looking for ultimately is a return profile and risk profile very similar to what we’re doing on the asphalt side. And what I mean by that is, these are long-term contracts with high quality customers, where we’re not taking the commodity risk or commercial risk associated with that business. We’re just providing our service. And so, in our minds, the risk return profile is going to be or should be very similar what we’re doing already on the asphalt side.

[Operator:]

The next question comes from Ronald Geffen with ELCO Management. Please go ahead.

[Ronald Geffen:]

Can you elaborate a little bit more on the convertible preferred, how you plan on retiring that? I don’t think there is a call feature? Would this be something that would be done in a Dutch auction, or is just be in the market, looking to retire some?

[Matthew Lewis:]

There’s a number of different options that we could look at Dutch auction could be one, partial tenders or open market, a lot of that depends on the percentage of the security that you’re looking to take out. But those are all under consideration. I think from our perspective, and again, we just go back to, if we don’t have a better use for that capital, when we think about the organic projects or acquisitions. We would look to continue down any number of those paths.

[Andrew Woodward:]

Ronald, this is Andy. I think it’s a good question. I will say, opportunistically looking at actually buying back the preferred, it’s been something that we’ve been saying for some time now. I think the only difference here is that we’ve finally checked the box on the leverage side, of getting leverage below our long-term target of 3.5 times. But certainly within our priorities buying back the preferred has always been within our priorities. As Matt said, it's not in lieu of us pursuing growth projects or high return projects on a risk adjusted basis.

[Ronald Geffen:]

Okay, if an 11% coupon right?

[Andrew Woodward:]

Yes, right around 10. I think based on where the units are trading today.

[Operator:]

The next question comes from Mike Murray, a Private Investor. Please go ahead.

[Mike Murray:]

Yes, as you all know, there is a lot of investors that don't like receiving K-1s. And since you're really pursuing a growth strategy now versus a distribution strategy, I think you said distributions were certainly on your list or way down? What is the advantage of staying as an MLP versus growing as C-corp or just a regular corporation if long-term growth and being - as you said being a continuing company forever? I don't see what the MLP - how does that help, you all will help us now?

[Andrew Woodward:]

I appreciate that question, Mike. And I think where the tax - federal tax rate is right now, I will recognize that companies that are looking at structures today, potentially IPOing may start to look more at C-corps than MLPs. So I certainly think there's argument for that now. But I think for us, we chosen this vehicle back in 2007 when the tax rates were different. And we still see a lot of benefits from us being an MLP along with our sponsor. And we don't like to change courses just based off of a new administration or even what's expected from a future administration. And so, we've chosen to be in the MLP structure and I think there is, benefits that we've reaped from that - from a tax perspective. But we also - similar distribution, we're choosing to look at our business regardless of the vehicle we choose from a business corporate standpoint. And what I mean by that is - and I won't go into as much detail as before. But what I mean by that is we're going - regardless of our structure, what we have - what we plan to do with Blueknight is to drive real business strategy and corporate strategy going forward. And if something - it’s down the road, we feel that the structure itself is limiting us in any way. From pursuing that direction, we will certainly look at the cost benefits of potentially other structures. But today, we feel like it's a very supporting structure, not only for us, but for our sponsor.

[Mike Murray:]

Well, I'm not sure what the benefits are, but you've changed the whole company. I mean, you've really gone from, I guess, the standard MLPs, like you said that was going to try to increase distributions and that was the model to - where your model now is just a long-term growth company? And I don't know the mechanics if you could just shift to a straight corporation where - your dividends have a tax advantage or not, but it was just a curiosity question. So I'll take it - take your word that it's better for you all to stay as an MLP right now.

[Andrew Woodward:]

We appreciate that, Mike.

[Operator:]

This concludes the question-and-answer session. I would like to turn the conference back over to Andy Woodward, the CEO, for any closing remarks.

[Andrew Woodward:]

I just want to - again thanks everyone for participating in today's call. I think this was a good call. We've had more interest in the call, I think, this time than other times. And so, I can honestly say that it sounds like the investors are equally as excited as we are and hopefully that's come across with our comments. So we appreciate your support and interest in Blueknight. And look forward to speaking to many of you over the next few quarters at one of our several investor conferences. And in the meantime, as always, please feel free to reach out with any further questions. Thanks again.

[Operator:]

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.